City Announcements
Full Year Results - Year ended 30 June 2007
Morse plc
Full Year Results
Year ended 30 June 2007
Strong profit growth as Morse becomes a pure professional services business
Financial Highlights
- Operating profit from continuing operations before exceptional items up 16% to £12.2 million (2006: £10.6 million), having significantly improved in the last two years (2005: £7.6 million)
- Operating margin percentage from continuing operations before exceptional items up 1.2% points to 4.8% (2006: 3.6%)
- Profit before tax* from continuing operations before exceptional items up 14% to £12.5 million (2006: £11.0 million)
- Revenue from continuing operations of £256.5 million (2006: £296.5 million)
- Strong cash position of £15.3 million to support ongoing investment in the business (2006: £17.8 million)
- Proforma adjusted basic earnings per share** of 5.6p (2006: 5.0p)
- Proposed final dividend of 2.80p per share (2006: 2.70p per share) resulting in a total dividend for the year up 3.8% at 4.05p per share (2006: 3.90p per share)
* includes total net financing income of £0.3 million (2006: £0.4 million)
** definition can be found in the Earnings Per Share section of the Financial Review
Statutory results for continuing and discontinued operations
- Operating profit £4.3 million (2006: £12.8 million)
- Profit before tax £3.8 million (2006: £6.0 million)
- Basic earnings per share 1.0p (2006: 2.6p)
Operational Highlights
- Successful demerger of Monitise with no further funding obligations, giving Morse the strategic focus and financial strength to fulfil its potential as a professional services firm
- Fully integrated business operating under a single Morse brand, with strong differentiation in the business and IT consulting services market
- Clearly defined growth strategy and medium term performance objectives to:
- Double the operating margin to 7.2% (from 3.6% at 30 June 2006)
- Deliver absolute operating profit of £20.0 million
- Enhance operating margin by between 0.5% and 1.0% per annum
- Improve gross margin to between 27% and 30%
- Enhance the recurring revenue stream from 24% to 30%
- Increase chargeable headcount aligned to our revenue and profit targets
- Develop the balance of One Morse clients to greater than 50% of our core relationships
- Strong prospects for the current financial year
Commenting on the results Richard Lapthorne, Chairman of Morse plc, said:
"Following the demerger of Monitise at the financial year-end, Morse now has the strategic focus and financial strength to fulfil its potential as a pure professional services firm. With the demerger of the Monitise business from Morse, Kevin Alcock was appointed Chief Executive Officer of Morse plc, having been Chief Executive of the Morse operating business since August 2006. Duncan McIntyre, previously Chief Executive Officer of Morse plc, has moved to the role of Deputy Chairman. Management remains focused on the strong financial management that has been a hallmark of the Morse story to date, while pushing forward with clearly stated performance objectives and well defined actions to deliver shareholder value."
Kevin Alcock, Chief Executive Officer of Morse plc, added:
"Morse has transformed itself into a fully integrated professional services company operating under one brand and, as a result, has made significant progress in improving the quality and mix of our business. By combining the strengths of our three business units into a single portfolio of services, we are now providing our clients with specialist advisory and execution services in support of their business strategies and operating models including business processes, IT applications and IT infrastructure.
What differentiates us from other companies in the market is our specialist knowledge, our ability to respond quickly to our clients’ business and IT needs, and our company culture. The new Morse brand is developing an outstanding reputation in the business and IT services market in our chosen sectors and we have the right strategy, investment capability and management skills in place to exploit our key strengths and to build on the strong position we have already established in our chosen markets.
We have made a good start to the current financial year across all business units and remain on track to achieve our performance targets of a 7.2% operating margin producing an absolute operating profit of £20.0 million over the medium term. The business continues to identify and execute on opportunities to accelerate our strategy, we are moving forward with increasing confidence."
Contacts:
Morse plc Tel: 020 8380 8000
Kevin Alcock, Chief Executive Officer
Eric Dodd, Group Finance Director
Financial Dynamics Tel: 020 7831 3113
Harriet Keen
Haya Chelhot
Morse plc ("Morse" or "the Group"), the advisory & execution professional services company, announces its full year results for the twelve months ended 30 June 2007.
In the year Morse plc consisted of two operating units; Morse Consulting (Morse’s professional services business) and Monitise (Morse’s secure mobile banking applications business). The demerger of Monitise was completed on 28 June 2007, resulting in Morse becoming a pure professional services business reported here as continuing operations. For the year ended 30 June 2007 the results for the Monitise business include an operating loss of £7.3 million (operating loss of £6.6 million and share of loss of JV of £0.7 million) and £2.5 million of expenses associated with the Monitise demerger. These results are reported as discontinued operations and prior year figures have been restated accordingly.